We must spend more on our energy regulators
The roles and effects of our various utility agencies are little known by most Hawaii residents
CALLING for more state government workers and higher pay for them is never popular. But if we want to improve Hawaii's energy future, that is exactly what we have to do with our utility regulatory agencies.
Members of the Hawaii Energy Policy Forum, a broad spectrum of more than 40 stakeholders who care deeply about Hawaii's energy future, might not agree on all issues, but they do agree completely on a few things. One is the need for increased support and funding for adequate staffing of the Public Utilities Commission and Division of Consumer Advocacy .
From school kids to seniors, most of us have some notion that the Legislature and governor make decisions that affect our daily lives. Remarkably few people know much about our utility regulatory agencies, which in some matters have a more direct effect on us.
The PUC has a wide range of important responsibilities. It regulates the rates utilities can charge customers, totaling more than $2.5 billion annually for Hawaii's electric, gas and telecommunications utilities. That's hundreds of dollars from each of us every month.
In addition, the Legislature has given the PUC broad policy-making responsibilities, including determining what types of new energy resources will be built in Hawaii for decades to come. Even now the Legislature is adding to the PUC's duties and responsibilities in energy and other areas.
The Division of Consumer Advocacy is an essential part of the regulatory process. It represents the interests of consumers who, as a group, do not have the time or expertise to participate in the complex technical proceedings before the PUC.
Despite the importance and magnitude of their responsibilities, the PUC and the DCA are understaffed and under-funded. Although the Hawaii PUC has more responsibilities than most commissions on the mainland, it has the smallest staff per capita of any commission in any comparably sized state in the country.
Both agencies have difficulty recruiting and retaining the specialized staff needed to provide the technical, economic, policy and legal expertise necessary for effective energy regulation. Hawaii PUC and DCA staff salaries are low by industry and mainland standards. Furthermore, the job requirements and duties of these agencies are more demanding than their state agency counterparts. For example, few other state employees regularly have to testify under oath in adversarial hearings and face cross-examination by high-priced utility lawyers.
Even with these constraints, the PUC has recently made remarkable improvements, opening up the regulatory process, providing public access to documents, addressing long neglected policy matters, and rebuilding staff capability. The DCA has also been more responsive and committed in its role with its new leadership.
In the current session, the Hawaii Energy Policy Forum championed a House Bill 1021, which would have increased funding to the PUC and DCA by dedicating the funds already collected from customer utility bills for this purpose. It would have raised PUC commissioner salaries to more reasonable levels in line with their required duties and responsibilities and more in line with mainland commissioner salaries.
These provisions were replaced with a suggestion that the PUC and DCA should submit a reorganization plan to the next legislative session. House Bill 1021 still includes provisions that would help the PUC hire and retain qualified staff. The forum therefore strongly supports the remaining provisions in HB 1021.
The 43-member Forum, based at the University of Hawaii at Manoa, is an experiment in inclusive, collaborative energy planning and policy making. It brings together businesses, utilities, the university, government, environmental organizations and the community. It uses discussion, compromise and consensus to bring different perspectives and broad experience to the design of a flexible, forward-looking energy strategy.
The forum hopes that the administration and Legislature will prove to be sincere in their support of a comprehensive and bold energy strategy for Hawaii by providing the necessary support to the PUC and the DCA -- in the short term by allowing them to obtain the professional staff they need; and in the next session by supporting and adequately funding the reorganization of these agencies. The forum will continue to monitor and advocate for these reforms to revitalize the PUC and DCA in order to implement good energy policy in Hawaii.
We all rely on the PUC and DCA to ensure effective, reasonable and fair energy policy implementation. Adequate support of these agencies is essential if Hawaii is going to control energy costs and successfully implement progressive energy policies.
Carl Freedman is chairman of the Hawaii Energy Policy Forum's Regulatory Reform Work Group and authored the forum's report "Hawaii Energy Utility Regulation and Taxation." He is the principal of Haiku Design and Analysis, a Maui-based consulting firm specializing in utility regulatory affairs and long-range planning.